DESCRIPTION (provided by investigator): Pattern formation and morphogenesis during development are organized by secreted proteins that transmit signals between cells. Fatty acid modifications have been shown to affect the trafficking and membrane targeting of intracellular proteins. The recent discovery that three classes of secreted signaling proteins also carry fatty acid modifications was unexpected, since these proteins have to travel through the aqueous extracellular environment. Palmitoylation catalyzed by the acyltransferases Rasp and Porcupine promotes the secretion, transport and signaling activity of Hedgehog and Wnt family proteins. A recent study from our lab demonstrated that Rasp also palmitoylates Spitz, a ligand for the Drosophila Epidermal growth factor receptor. Palmitoylation restricts Spitz diffusion, but enhances its biological activity. These results suggest the possibility that other secreted signaling proteins might also carry lipid modifications. The objective of this proposal is to use two complementary approaches to determine the prevalence of lipid modifications of secreted proteins that act as intercellular signals during development. The first aim is to mutate three uncharacterized Drosophila genes encoding acyltransferases homologous to Rasp and Porcupine, and to test the mutants for defects in signaling protein function. The second aim is to survey a sample of secreted signaling proteins from all the known families for hydrophobicity when expressed in cultured cells;hydrophobic proteins will then be tested for their ability to incorporate radioactive palmitate. If evidence for fatty acid modification of a novel ligand is obtained, both biochemical and genetic methods will be used to identify the modification and the acyltransferase responsible. The importance of this modification in vivo will be tested through mutation of the acylation site. These experiments will improve our understanding of the functional roles of this novel modification of secreted developmental signals. Public Health Relevance: Recent research has revealed the surprising finding that several secreted proteins used by cells to signal to each other during development have attached fatty acids. Although such hydrophobic modifications seem inconsistent with diffusion through the extracellular environment, they are essential for the functions of these signaling proteins. We propose to investigate whether additional secreted proteins that act as developmental signals also carry similar modifications. A combination of biochemical and genetic techniques will be used to survey both potentially modified proteins and the enzymes likely to add the modifications. We will use Drosophila as a model system, due to its advantages of speed, economy and powerful genetic tools. Evolutionary conservation suggests that the results will also be applicable to humans and may illuminate the basis of birth defects.